Disruptive innovation

﻿This post is Part I of A Brief History of Disruptive Innovation. Part II can be found here. For thousands of years, beginning around 10,000 BC in the Middle East, humankind embarked upon its first disruptive revolution. Until that point, humans had roamed the earth in hunter-gatherer societies, foraging for food. When ancient humans discovered farming, and began settling permanently, in one place, advancements in agricultural technology led to a surplus food supply, which in turn, led to surplus time. The result was unprecedented innovation, and explosive technological, economic and social development — hallmarks of recorded history. Still, the neolithic revolution is not without detractors. Jared Diamond, author of the famous “Guns, Germs and Steel,” posited in 2009 that the move from hunter gatherers to farmers was “the worst mistake in history.” Indeed, 12,000 years after the fact, the neolithic revolution has some serious retroactive detractors. While objections to farming’s impact are unlikely to impact our dependence on it, Diamond’s comments illustrate an important point — no innovation, no matter how obviously beneficial it might be, is immune from fierce criticism. When detractors of disruptive innovation live to see them introduced, that criticism turns to active opposition. Throughout history, the forces of the status quo have conspired to impede progress, and prevent radical innovations from claiming market space. Resistance to innovation is littered throughout history. Roman historian Pliny the Elder, as well as two other writers, tell of a radical inventor who brought a new type of glass before emperor Augustus. The glass was supposedly unbreakable; upon throwing it to the ground, various sources recount it bouncing, denting but not shattering. Augustus worried that the value of the glass would undermine the value of his gold and silver, so promptly ordered the man executed. “Flexible glass” or “vitrum flexile” was lost for almost 2,000 years, appearing sometime in the last one hundred years.* Thus, a single power holder, fearful for his immediate wealth, single-handedly suppressed an innovation for millennia. And that’s just the beginning. Mike Masnick points to the 17th century French textile industry as an early innovation stifler. When the question of how best to handle innovative cloth buttons was brought to the “masters of the weaving industry,” (think an ancient MPAA) they produced the following verdict: If a cloth weaver intends to process a piece according to his own invention, he must not set it on the loom, but should obtain permission from the judges of the town to employ the number and length of threads that he desires, after the question has been considered by four of the oldest merchants and four of the oldest weavers of the guild. The legacy weavers had a stated goal of maintaining the status quo, which meant that very few innovations were approved. Once the anti-innovation precedent had been established, the button makers guild, our incumbents, joined the fray, furious that certain tailors had made buttons out of cloth. The government reacted in accordance with the legacy button industries, imposing a steep fine on tailors who insisted upon using cloth buttons. However, the button guild maintained that the fine was insufficient. Following further lobbying attempts, they won the right to search homes, wardrobes and passerby in order to locate the offensive buttons. Violators were fined and arrested. While today, consumers may purchase a wide variety of buttons, the French weavers set a dangerous precedent: businesses which feel threatened by new competition turning to government to crush the opposition, rather than innovate themselves. The French government, in their suppression of Calico cloth, went further still. George Smith tells of delight at a new, cheap technology, which produced a cloth which was printed, rather than dyed. This new cloth changed the economic landscape in France, as...

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...articles by Bower & Christensen (1995) and Markides (2006) discuss several types of innovation: disruptive technologies, radical innovations and business model innovations.
a) Please describe in your own words (but based on the articles) what the following concepts mean: (i) business model innovation, (ii) radical innovation, and (iii) disruptive technologies.
b) Please explain how according to Markides (2006) business model innovation differs from disruptive technologies?
c) Please consider the following statements:
- Nintendo’s Wii is a disruptive technology
- Nintendo’s Wii is a radical innovation
- Nintendo’s Wii is a business model innovation
For each of these statements state whether it is true or false. Use examples from the case to support and explain your answer.
Assignment Question 2:
In their article, Bower and Christensen (1995) make some statements regarding which organizations are more likely to come up with disruptive technologies.
a) Bower and Christensen (1995) state that strong customer focus inhibits creating disruptive technologies. Do you agree with this statement? Explain why this statement is correct and/or wrong. How does this statement apply to the Nintendo case? Please support...

...is a term called disruptiveinnovation. Disruptiveinnovation was coined by Clayton Christensen. It explains the process of a product or service preliminary application initiating from the bottom of the market that replaces an already established product or service. (????) This theory has created a significant impact on management practices in all types of industries. It has created debates of how “executives and managers are in need of research that will elevate the pursuit of successful innovations from a gut-level, intuition-driven art to something more closely resembling a science based on repeatable processes with predictable results.” (Raynor, p. 27) In doing so, it has also created a sense of conflict between entrants, incumbents and disrupters to see which organization will remain the top supplier.
Innovation is always on the top mind for all CEOs. Understanding how to identify disruptiveinnovations before they become mainstream and take advantage of the ‘”white space” is a skill to cultivate. DisruptiveInnovation patterns are always changing and sometimes are very difficult to see because of it’s rapid growth. (Gordon pg ??)
Similarities;
Raynor:
Disruption theory can be used to shape existing innovation ideas in ways consistent with the theory's prescriptions. As of now the disruption theory of...

...﻿Is 'disruptive' a useful concept for understanding media innovation? Discuss its advantages and limitations.
In the early concept of innovation concept, depending on the degree of innovation and the effects it produced, it can be divided into two types, the incremental innovation and disruptiveinnovation. The incremental innovation refers to a natural innovation process step by step in the lifecycle of a product in the process of technology evolution, in accordance with the original technology path; the breakthrough innovation refers to a product’s life cycle jumped to another life cycle in the process of technology evolution. Incremental innovation and breakthrough innovation can be called sustaining innovation, these are two normal innovation process of products.
A disruptiveinnovation is an innovation which enables a product create a new market and value chain, and ultimately undermine the existing, stable market and value chain, replacing the previous technology. The term was firstly used in business and technology aspects, it enhanced the product and service quality with an unexpected way, generally it attracted the targeted consumers who are in the new market, and secondly it achieved its “undermining” effect through a...

...Jasper 1998).
INNOVATION AS A CRITICAL INDICATOR FOR SUCCESS
Many companies will treat innovation as black-box, the serendipitous achievement of a few gifted individuals. But this survey found that innovation leaders consistently outperformed laggards on five manageable capability areas. In the past, most successful companies were duopolies or mono polices as compared to recent times were free market trade, globalization and the ability to satisfy the customers expectation is the key to profitability. Innovation involves exploiting new ideas resulting in the creation of new services, product or process. It is not just the development of a new idea that is important, but bringing the idea into the market and putting it into practice by exploiting it in a way that leads to new services, systems or products that add value and improve quality. This is a critical indicator to most business success as customer satisfaction is fully derived from the product and services and not just for the selfless gain of the company (Eric Almqust 2013).
Apple is an example of innovative company as they are able to develop new versions of the iPhone which is similar in nature but still at the same time gain high profitability by the ability to make customers see the uniqueness and need for it. This involves a high level of creativity to succeed above others in the mobile industry. It possibly involves management restructuring and...

...Abstract
Vineet Nayar is a charismatic leader that utilized disruptiveinnovation to improve HCLT in the IT industry. The rapidly changing IT industry was trending in the global environment. Although HCLT was increasing revenue it was not increasing their market share. To transform HCLT into a market competitor Nayar utilized associating, questioning, observing, networking and experimenting to reach and accomplish HCLT's success. However, Nayar neglected the market status in the beginning of this transformation and he did not network with other leaders in the IT world. Had he done both, he may have improved HCLT more than he did.
Nayar and Innovation
"At HCL we believe an employee is at the core of every bright idea that is a game changer." ~HCL, 2013
Introduction
HCL Technologies (HCLT) Limited is a global information technology (IT) services company. HCLT offers services in software-led IT solutions, remote infrastructure management, engineering and Research and Development (R&D) services, and business process outsourcing.
In 2005, HCLT hired Vineet Nayar. Nayar used the five discovery skills referred to in Dyer, Gergensen and Christensen's The Innovator's DAN; associating, questioning, observing, networking and experimenting also referred to as disruptiveinnovation. In using these skills, Nayar was able to look over the global environment and ask what HCLT was doing and how could it...

...Source of Innovation
1: Unexpected Success and Failures
According to Drucker, the best source for successful innovation is from an Unexpected Success or Failure. Exploitation of this requires analysis simply because an unexpected success is a symptom.
For example: A competitor is having unexpected success in a particular market segment. Management must find out why this is happening, asking themselves what it would mean to them if they exploited it.
Unexpected Failures can also lead to other opportunities for innovation as suggested by the following quotation by a former CEO of Johnson and Johnson:
“Failure is our most important product.”
R. W. Johnson, Jr., Former CEO, Johnson & Johnson (1954)
As an example, the Ford Motor Company developed a new automobile, the Edsel, in 1957. The auto's design stemmed from extensive market research about customer preferences in appearance and styling, yet the Edsel became a total failure immediately after it was introduced. Barely a soul wanted it.
Instead of blaming the "irrational consumer", Ford's management decided there was something happening that was not in line with general auto-industry assumptions about the reality of consumer behavior. After reinvestigating the market, they discovered a new "lifestyle segment" to which they quickly responded by producing the superbly designed and produced Thunderbird model - one of the greatest successes in US auto...

...countries are different from the needs of developing countries’. The articles referring the frugal and reverse innovation indicate that customers of developed countries need high-end products. On the contrary, most customers of developing countries need middle-class and below products.
The articles mention that the high-end market has little room for marginal profits and potential market growth. As the result, multinational firms seek new opportunities in the emerging markets in order to look for the future growths and profits. If multinational corporations plan to export their existing successful products to the developing countries, they need to consider this fundamental difference as a key factor in order to meet the customers’ needs. Meanwhile, if companies recognize the customers’ difference, the companies can get ready for challenges of local constraints and problems before loss investment and time. Therefore, it is essential for companies to understand the difference in customer’s need between developing countries and developed ones.
2. Can you meet the needs of your customers in developing countries simply by customizing your existing offerings? When is clean-slate innovation needed? Please elaborate as appropriate from your readings and experience.
Under the traditional thinking, multinational companies trend to directly generate developed innovations or technologies in the emerging markets. Further...

...Article Review
26/07/11
“Innovation by Subtraction”
Innovation has always been a lifeline to the development of new products, services and better standards of living. According to Management expert Peter Drucker “if an established organization, which in this age necessitating Innovation, is not able to innovate, it faces decline and extinction.” Innovation is a development process and translation of an idea into an application, solving present or unknown problems and implementing changes and perception of how the problem or obstacle can be perceived or utilized.
Paul Sloane in his article “Innovation by Subtraction” talks of how there is a tendency to think that the best way to innovate is to add new features to our existing products and services, and that this is not always the best viable solution. If you add too much to an existing product a customer could become puzzled, fatigued and overloaded with features, not to mention associated costs. That sometimes the better solution lies in subtraction.
He uses Ryanairs business model as his main example, based on Southwest Airlines existing concept Michael O’Leary used innovative subtraction to eliminate all the frills from air travel which enabled Ryan Air to offer cheaper flights than its competitors.
O’Leary subtracted amongst other things the middlemen (travel agents), and ticketing saving on paper, postal costs staffing, and also...